FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Dividing partnership income
Carmelo Fernandez and Bobby Morett formed a partnership, investing $187,500 and $62,500, respectively.
Determine their participation in the year's net income of $290,000 under each of the following independent assumptions:
a. No agreement concerning division of net income.
b. Divided in the ratio of original capital investment.
c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
d. Salary allowances of $38,000 and $45,000, respectively, and the balance divided equally.
e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $45,000, respectively, and the remainder divided equally.
Fernandez
Morett
a.
b.
C.
d.
e.
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Transcribed Image Text:Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing $187,500 and $62,500, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $45,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $45,000, respectively, and the remainder divided equally. Fernandez Morett a. b. C. d. e.
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